Mid-year economic analysis forecasts GDP growth at 5.7 % for 2012-12

Mid-year economic analysis tabled in Parliament on Monday estimated GDP growth at 5.7 to 5.9 percent for the fiscal year 2012-13 as against earlier estimated projection of 7.6 per cent. 5.7 percent GDP growth for fiscal year 2012-12 implies close to 6 percent growth rate in the second half of fiscal year against 5.4 per cent in the first half. The mid-year economic analysis is the second quarterly review.
Moderate inflation is expected to help recover GDP growth in the second half of the current year.

Report forecast stable growth and gradual recovery indicative of already stabilizing and picking up growth.

Report highlighted slower growth rate of economy at 5.4 percent, year on year, in the first half of the current fiscal year that hit all the major sectors of the economy, including agriculture, industry and services. Economy grew at an average rate of 8 percent in the last decade. Agriculture sector slowed down on account of deficient rainfall in the current year resulting in slowdown of some segments of the services sector tied to agriculture and industry.

“There is an upturn in the Business Expectations Index for the October-December quarter, the PMI index has moved up in November, there is buoyancy in capital markets, there are improved internal accruals in the corporate sector, and there is some pick up in manufacturing, as reflected by 8.2 per cent growth in IIP in October 2012 vis-à-vis October 2011,” said report.

The report said the Government is continuously monitoring the fiscal situation and it announced the roadmap for fiscal consolidation that aims at containing the fiscal deficit at 5.3 per cent of GDP in the current year and reducing it to 4.8 per cent in the year 2013-14. It aims to further reduce it by 0.6 percentage points each year in the next three years i.e. from 4.2 per cent in 2014-15 to 3 per cent in 2016-17. In order to contain the rising subsidy burden, Government raised diesel prices and capped subsidised LPG cylinders to consumers and placed great emphasis on expenditure cuts, and realisation of budgeted revenues.

Report attributed negative growth of merchandise exports and imports from the third quarter of 2011-12 to slowdown in the global and the domestic economy. While the former affected the exports, latter resulted in the slowdown of imports. The trade deficit in April-October 2012 was US $ 110 billion as against US $ 106.8 for April-October 2011. The large trade deficit is attributed primarily to slow growth in export markets, the inelastic nature of imports, and rising prices of crude oil and gold. The higher trade deficit led to large current account deficit that stood at 4.2 per cent of GDP in 2011-12 notwithstanding an increase in the surplus on net invisibles account. The current account deficit is expected to be around 3.7 per cent in the current financial year. 

Report put foreign exchange reserves at US $ 295.3 billion at the end of October 2012, as against US $ 294.4 billion at the end of March 2012. External debt increased by nearly US $ 40 billion between end of March 2010-11 and end of March 2011-12. External debt was US $ 349.5 billion at the end of June 2012.

Mamata launches campaign for panchayat elections

West Bengal chief minister Mamata Banerjee today launched her campaign for the upcoming panchayat elections in the state from Purulia.

She is on a three-day tour to the Maoist- infested Jangalmahal and addressed a public gathering at Hutmora under Purulia district today.

Banerjee assured the gathering at Hutmura of more loans, roads construction and employment, and requested for additional six months to provide more benefits to people.

She circuitously asked people not to support CPIM which still controls Purulia zilla parishad and appealed for votes to bring Trinomial Congress to power. She promised government’s support to those who fight terrorism.

At the same time, Banerjee attacked the UPA government of depriving central assistance to the state.

"The Centre wants us to die of hunger but as long as we are in power in the state, we will not let that happen. We may be poor, but not beggars," she said.

"We know how to get back our rights," she added.

Trinamool supremo promised to assist farmers with tractors and agriculture inputs even if her government failed to secure financial assistance from central government.

Given price hike in diesel, she promised to make available electricity for irrigation.

"We will build our own resources to sustain our agriculture," she held.

She claimed her government achieved many things in the last one and a half years despite severe fund constraint.

"I challenge the opposition to charge me with defamation if I have given any false promise to the people," said firebrand leader.

She also accused a section of the media of maligning her government and urged the people not to give credence to false reports against the government.

Gujarat BJP releases manifesto for assembly poll

Gujarat BJP today released the party manifesto for the 2012 Gujarat State Assembly Elections. Gujarat Chief Minister Narendra Modi, Leader of the Opposition in the Rajya Sabha Shri Arun Jaitley, Gujarat BJP President Shri RC Faldu and BJP National Vice President Shri Purushottam Rupala were present at the occasion.

Describing manifesto as a blue print for the next 5 years, Modi said it’s not just mere promises but a strong commitment towards development.

Considering the emergence of neo middle class, Modi said the manifesto is designed to take special care of the class.

“Sankalp Patra (manifesto) not only talk about youth development but also youth led development,” he added.

The Chief Minister stated that the Sankalp Patra gives importance to Skill, Scale and Speed.

Manifesto promises to develop comprehensive approach for promotion and development of sports in Gujarat.

It focuses on providing state wide Wi-Fi network, women development, agriculture, smoother milk production process and increase in land under irrigation.

It also pledges to set up Lake and Wetland Authority.

Manifesto encourages youth education by undertaking that State Government will become guarantor for youngsters who seek loans to start new initiatives.